U.S moves to block shipments of semiconductors to China’s Huawei

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The U.S. Department of Commerce, on Friday moved to block global shipments of semiconductors to China’s tech giant Huawei, in the latest sign of mounting tensions with Beijing that are rattling markets.

The department would change listings to narrowly and strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology, according to a statement.

The department said the Chinese giant was still using U.S. software and technology to design semiconductors, a practice that was undermining national security objectives and export control rules by making acquisitions overseas despite being blacklisted in 2019.

“We must amend our rules exploited by Huawei and HiSilicon and prevent U.S. technologies from enabling malign activities contrary to U.S. national security and foreign policy interests,’’ Commerce Secretary Wilbur Ross said in the statement.

In a separate statement, Commerce said it was making a final 90-day extension of a temporary measure that allows U.S. users of Huawei technology to continue to temporarily operate such devices and existing networks while hastening the transition to alternative suppliers.

The statement said the U.S continues to assess the national security and foreign policy implications of companies and individuals that have not yet transitioned from Huawei equipment.

Huawei has been at the centre of the ongoing power struggle between the U.S. and China, amid rising rhetoric towards Beijing from the U.S. administration heightened by the COVID-9 pandemic.